I.

INTRODUCTION

OBJECTIVE OF THE PROJECT

1) To setup a manufacturing unit for the production of Corrugated Boxes.

2) To provide the customers with strongest and good quality corrugated boxes at cheaper
rates.
3) To achieve full capacity in five years by acquiring new orders.

RATIONALE & SCOPE /PROSPECTS OF THE PROJECT:

Corrugated Packaging is visible wherever goods are produced, transported and displayed.
Since its invention years ago, corrugated packaging has ensured efficient safe and
sanitary transit of goods, protecting and wrapping about 70% of the world’s liquid and
solid materials from producer to consumer.

In India, the demand for corrugated packages is increasing, as the industry is growing at
the rate of 22-25 per cent per annum according to Pack Plus. Corrugated packaging
protects the product during storage, transportation and handling. Thus the package, by
virtue of its protective function-becomes a vital link in the distribution chain. Also
corrugated cartons offer the most practical and economic choice for packaging.
Product range includes consumer packages, food and non food-packages, transport
packages.

The aforementioned qualities have made Corrugated Fiber Board Boxes rapidly popular.
Some of the recent survey has revealed that 80% to 85% is now being done by it.

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REVIEW OF INDUSTRIES RELATED TO THE PRODUCT:

A list of major industries, in which it is extensively used at present, is being given below:

1. Breweries
2. Glass-wares
3. Cigarettes
4. Pharmaceuticals
5. Soap & cosmetics
6. Milk & milk products
7. Biscuits
8. Tea & coffee
9. Hosiery & footwear
10. Toys
11. Photographic Equipments
12. Textiles & ready-made garments
13. Electric goods
14. Electric bulbs
15. Hardware
16. Bicycle & auto parts
17. Rubber and rubber products
18. Stationery
19. Matches
20. Defense
21. Food Preservation
22. Cashew Nut Industry
23. Synthetic (Man-Made) Industry
24. Horticulture products, tobacco
25. Apple, Cherry, Grapes etc.

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II. TECHNICAL FEASIBILITY

A. DESCRIPTION OF THE PRODUCT:

CORRUGATED BOARD

Corrugated fiberboard is a paper-based construction material consisting of a fluted

corrugated sheet and one or two flat linerboards. It is widely used in the manufacture
of corrugated boxes and shipping containers.

Corrugated board is made with a corrugated sheet of paper attached to the facings of
flat paper usually craft by machine. Here two paper reels run together. One layer of
paper becomes corrugated after passing through the heated corrugated rolls and the
other is bought into contact with it after former having glued at the tips. Thus, both
get pasted together. Then, rolls of these corrugated sheets are made.

The resulting roll is known as 2 ply or single face corrugated board. By cutting this
roll with BOARD CUTTER and then gluing the corrugated side by pasting machine
and then placing the 3rd ply of paper over it, double face under produced. This board
is kept under pressure in SHEET PRESSING machine for some time, for setting of
wet glued sheets. Similarly, board over board can be pasted to produce thicker boards
of width of 5-ply, 7-ply, and 9-ply.

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B. PRODUCT SPECIFICATIONS:

Product specifications are provided by the customer according to their needs. The product
specification can be categorized into following forms:
1. Designation of box
2. Product to be packed
3. Quantity and arrangement of contents in the box (alternatives)
4. Style/construction of the box, including interior fitments
5. Type of corrugated board/flute configuration
6. Quality grade of corrugated board/eventual raw materials specifications
7. Minimum required bursting strength (Mullen)
8. Inside dimensions of the box/eventual tolerances
9. Type of manufacturers’ joint
10. Special features/treatments
11. Detailed printing instructions, including quality certificate stamp
12. Quantity of purchase (alternatives)
13. Method of packing/shipping empty boxes

Various sizes of boxes that we are manufacturing:

Size 1 Size 2 Size 3 Size 4
10*10*8 22*15*10 16*16*16 20*20*10
3-ply 5-ply 5-ply 5-ply

The paper width taken by us is of 22-28 BF. BF is the abbreviation of BURST FACTOR.

C. USES OF PRODUCT:

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Corrugated boxes are used for packaging purposes.
A list of major industries, in which it is extensively used at present, is being given below:

1. Breweries
2. Glass-wares
3. Cigarettes
4. Pharmaceuticals
5. Soap & cosmetics
6. Milk & milk products
7. Biscuits
8. Tea & coffee
9. Hosiery & footwear
10. Toys
11. Photographic Equipments
12. Textiles & ready-made garments
13. Electric goods
14. Electric bulbs
15. Hardware
16. Bicycle & auto parts
17. Rubber and rubber products
18. Stationery
19. Matches
20. Defense
21. Food Preservation
22. Cashew Nut Industry
23. Synthetic (Man-Made) Industry
24. Horticulture products, tobacco
25. Apple, Cherry, Grapes etc.

D. MANUFACTURING PROCESS OF CORRUGATED BOXES:

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 Raw Material Purchase

Corrugation

Paper Cutting

Pasting

Die Cutting Machine

(Rotary + Slotting)

Stapling

Sun Drying

Dispatch

E. ALTERNATIVE MANUFACTURING PROCESS:

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 Corrugation

Paper Cutting

Pasting

Rotary

Slotting

Stapling

Sun Drying

Dispatch

F. JUSTIFICATION OF THE ADOPTED PROCESS:

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The process starts with paper being converted into corrugated boards on the corrugation
machine. These corrugated boards are converted into corrugated board reels and are sent
for cutting. Cutting is done according to the specifications provided by the customers.
Pasting is done on the pasting machine. In this the width of the board can be deterred
according to the customer requirements.
Now, our manufacturing process is different from the alternative manufacturing process
because we are using Die Cutting Machine instead of Rotary and Slotting machines.

BENEFITS OF USING DIE-CUTTING MACHINE OVER ALTERNATIVE

MANUFACTURING PROCESS
1 Combines the work of two machines, i.e.: Rotary and Slotting machines.
2. It more efficient than the alternative manufacturing process in the following ways:
A. Space required by two machines is obviously more than space required by
one machine.
B. Work of two machines is combined so the inventory space for both the
machines is reduced. So, space is further saved.
C. Electricity consumption in one machine is less than the electricity consumed
by two machines.
D. In DIE-CUTTING machine 2 skilled labour and 2 helpers are required; where
as in Rotary and Slotting machine 1 skilled labour 2 helpers are required on
each machine. Cost of one skilled labour is Rs. 6,500, cost of semi-skilled
labour is Rs. 5,000 and cost of a helper is Rs. 3,500. So, the cost of labour
required in DIE-CUTTING machine is Rs. 20,000 but, the overall cost of
labour expended in both the machine is Rs.27, 000. The difference between
expenditure in labour is Rs. 7,000, i.e. cost of 2 helpers is eliminated.
3. Quality check is administered at just one stage if we use DIE-CUTTER but, in
Rotary and Slotting quality is administered in both stages.

MANUFACTURING PROCESS IN DETAIL:

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The Corrugation Machine:

Description

a. Space Requirement (area): 24 fts X 6 fts.

b. Cost: Cost of Corrugation Machine ranges between Rs.12 lakh.
c. Manpower: 1 skilled, 2 helpers.

Working:

i) Types of Papers Used:

1. Kraft Paper:
These are classified according to weight, i.e. in grams. Various types of
classifications are 230gsm, 180gsm, 140gsm, 120gsm, 100 gsm. Which are
further categorized into 16bf, 18bf, 20bf, 22bf, 25bf, 25bf.

2. Semi- Kraft Paper:

These are classified according to weight, i.e. in grams. Various types of
classifications are 230gsm, 180gsm, 140gsm, 120gsm, 100 gsm. Which are
further categorized into 16bf, 18bf, 20bf, 22bf, 25bf, 25bf .

3. Duplex:
Duplex paper is paper or cover stock, usually made by laminating two sheets of
paper. Each side is different. Duplex paper may be a different color on each side,
have a different finish on each side, or different textures.

Also Known As: double-faced, two-tone, double-sided, and different-sided

ii) The Manufacturing:

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Two paper reels are set in the machine of the desired breadth. Generally the size made is
between 22inches and 65inches. The corrugating machine can work on both electricity as
well as with on Liquefied Petroleum Gas with 1440 Rotation per Minute. When working
on electricity it requires between 300 to 400 volts of electricity power depending upon
the size of the machine i.e. 32inches, 42inches, 46 inches, 52inches and 65inches

The Paper Cutting machine:

After the corrugated papers are manufactured, they are taken for cutting. The corrugated
papers so manufactured are cut according to the specifications of the length and breadth
provided by customer.

There are two types of paper cutters:

a. Manual paper cutter.

b. Electronic paper cutter: Electronic paper cutter is attached with the
corrugation machine.

Labour Required: 1 skilled labour in Manual Cutter

In Electronic cutter no extra labour is required rather than the one who work on
Corrugators.

Sheet Pasting Machine:

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Hand fed sheet pasting machine is useful for gluing fluted side of board for making 3, 5
ply corrugated board.

Size 65"
Output per
60 Mtrs
minute
Motor H.P. 2

Labour Required:
1 Skilled, 2 Semi-skilled, 1Helper

Die Cutting Machine

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 Die Cutting Machine or Platen Punching & Creasing Press particularly designed for
Die Cutting, Scoring and Creasing Work on PAPER, LINOLEUM, CARD-BOARD,
CORRUGATED BOARD, FIREBOARD, CORK, LEATHER, PLASTIC AND PVC
MATERIALS etc

This machine combines two works Rotary and slotting together. The specification
about the product is feeded into the machine and it consists a set of several of blades
and pressing bars. This blades and pressing bar press the corrugated board to form
creases and cuts.

This machine requires 2 Skilled and 2 helpers.

Inside
23"x33" 25"x37" 29"x40" 32"x42" 37"x51" 42"x62"
Chase Size
Platen Size 25"x35" 28"x40" 32"x43" 35"x45" 40"x54" 45"x65"
H.P. 3 5 5 7.5 10 10
Impressions
1700 1500 1400 1300 1100 1000
per Hour
Weight
3.4 4 4.5 5.4 6.5 9.5
Approx.MT

Box Stitching Machine

This Machine is used for last and final operation in box making. Parts are standardized
and interchangeable. Machine is capable of continuously running at high speed. Design
of the Machine is universal & world famous. Very easy in operation, servicing &
repairing.

This machine requires just 1 skilled labour and 2 helpers.

G. PRODUCTION SCHEDULE:
The production schedule is 8 hours per day, manufacturing 4,000 boxes per day in first
year but having production capacity of 7,000 boxes per day.

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Production Schedule depends on the number of units we have to manufacture. This is
estimated on the basis of customer’s contract.
Our manufacturing capacity is 7000 boxes but we are working at 50% of our capacity and
manufacturing 4000 boxes per day and we will reach our 90% efficiency in 5 years.
The manufactured corrugated boxes are sold to the customers as per the customer’s
requirement.

H. PLANT DETAILS:

1. LAND:

(i) Total Plant Size

Built up area 10,500sq.ft.
Office 150sq.ft.

Factory 6800 sq. ft.

Free Area + Store Room 2000sq. ft. + 1300 sq. ft.

Guard room and washroom 150sq.ft+100sq.ft
Total Cost of Land + Building
70,00,000
( 60,00,000 + 10,00,000 )

2. PLANT LOCATION:

Selection of a district or a particular city for a project has an imperial effect on fixed and
operational costs. The proposed location should be located near the industrial areas as this
would reduce the transport cost.

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 Plant will be located in Kasna. It is place near Greater Noida.

JUSTIFICATION FOR SELECTING THE PLANT LOCATION:

Kasna has been taken up as the area for plant location because of the following reasons:

a. The land rates are comparatively cheaper than other land available.
b. It is an industrial belt. Majority of the small-sector manufacturing units are
located there.
c. Waste material disposal is easy there. This is due to the fact that waste material,
i.e. left out papers that come out on die-cutting, purchasers have their recycling plant
within the radius of 3 kms.
d. Raw-materials are purchased from Noida and other nearby sources.
e. Transportation expenses are low there as Kasna is a newly developing industrial
belt and that too more for small business. So, there is competition amongst the service
providers to acquire more customers. So, due competitive pricing, the rates of
transportation are comparatively low.
f. Cheap labour is also available there.

3. PLANT LAYOUT DESIGN:

ENTRANCE

G. R.
DIE CUTTING
MACHINE

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R. OFFICE
R.

P CORRUGATION STAPLING
L MACHINE MACHINE
A
N
T

E
N
T
FREE AREA (for Open Space for Sun-Drying and R
A
other relevant works) N
AND STORE ROOM C
E
PASTING
MACHINE

Room temperatures are maintained in the plant. So, that boxes don’t lose their strength
due absorption of moisture.

I. Availability of Raw Material

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All raw materials are available in the local market. There are many traders in Noida as:

a. Modi Nagar Paper Mill – Modi Nagar.

b. Janki News Print Ltd. – Meerut.
c. Shivam Paper Mill Pvt. Ltd. – Panipat.
d. Mahalaxmi Craft and Tissue Pvt. Ltd. – Muzzafarnagar.
e. Ashoka Paper Mill – Jawahar Nagar, Delhi.
All these raw material providers are located in the areas like Greater Noida, Noida,
Surajpur, Ghaziabad etc.

J. LABOUR REQUIREMENTS:

Salary Per
Sl.No. Designation No.
(Rs.) Annum(Rs.)
1 Supervisor 1 10,000 1,20,000
2 Accountant 1 12,000 1,44,000
Peon cum
3 1 5,000 60,000
Watchman
Total 3,24,000

Sno Labour & Operator Skilled Semi- Helper

. Skilled
1. Corrugation Machine 01 - 02
2. Board Cutter - - 01
3. Sheet Pasting 01 02 01
Machine

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 4. Rotary Machine 01 - 02
5. Slotter 01 - 02
6. Die-Machine 02 - 02
7. Stitching 01 - 02
8. Bundling and - - 05
Dispatching
TOTAL 05 02 13

(Labour requirements in GREEN colour are not required in our project as we confer
to DIE-CUTTING process)

Labour Wages

Salary Per-
Types of Per
Sl.No. No. Month
Labour Annum(Rs.)
(Rs.)
1 Skilled 05 6,500 3,90,000
Semi-
2 02 5,000 1,20,000
Skilled
3 Helper 13 3,500 5,46,000
Total 10,56,000

K. Waste Material Disposal:

Wastage is a common feature for corrugated packages business. It is estimated that 4% of

the total production goes into waste. But as the wastage occurs during the production
process, it is generally charged to the client. The wastage on the other hand is sold as
scrap by the manufacturer at the rate of Rs.6.00 to Rs. 7.00 per kg.

L. Power and Fuel Requirements:

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The overall power requirement of the plant on monthly basis.

S. NO. MODES OF QTY USED RATE PER AMOUNT(approx)

POWER UNIT
SUPPLY
1. POWER 5000 unit Rs. 5.00 Rs. 25,000
2. L.P.G Cylinder 25 Cylinders Rs. 1200 Rs. 30,000
3. DIESEL 132 Ltr. Rs. 38.00 Rs 5,000
TOTAL Rs. 60,000

M. Production Cost of the Product:

Size 1 Size 2 Size 3 Size 4

10*10*8 22*15*10 16*16*16 20*20*10
3-ply 5-ply 5-ply 5-ply
Cost Price: Rs.15.3 Rs. 16.86 Rs.20.3
Rs.5.40
Sales Price: Rs.24 Rs. 26.3 Rs.31.5
Rs.9.10
BOARD SIZE CALCULATION:

LENGTH OF THE BOX = 16”.

WIDTH OF THE BOX = 16”

HEIGHT OF THE BOX = 16”.

PAPER GSM= 100 * 100 * 100 * 100 * 100.

LENGTH OF THE BOARD = LENGTH + WIDTH + LENGTH + WIDTH

+ STICHING MARGIN.

= 16’’ + 16’’ + 16’’ + 16’’ + 2’’

= 66’’.

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WIDTH OF THE BOARD = WIDTH + HEIGHT + SPARE MARGIN.

= 16’’ + 16’’ + 1’’

= 33”.

PRICE CALCULATION:

PRICE OF THE BOX = 66 * 33 * 600

1550

= 0.8430 * Rs. 20/kg

= Rs. 16.86.

THIS IS ONLY THE PAPER COST.

TOTAL COST =Rs. 16.86

+ 8.43 (50% of paper cost – conversion cost *)

+ 01.00 (transportation cost Re. 1/box)

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 Rs. 26.29

TOTAL COST OF THE BOX IS Rs. 26.30 only.

(TAXES / VAT EXTRA AS APPLICABLE:

INTERSTATE – 2%, WITHIN STATE – AS APPLICABLE)

[* = 12% Profit, 4% Electricity Charges, 3% Gum, 4% Stitching Wire Cost,

4% Wastage, 3% Stores and Maintenance, 8% Salary and Wages,
3% Misc. Expenses, 4% Printing Charges, 3% Sales and Promotion,
3% Interest on Working Capital. ]

III. MARKET FEASIBILITY

A. The Market Description:

 The highly fragmented packaging industry is estimated at Rs 8,000 crore.

 The industry is growing at the rate of 22-25 per cent per annum according to Pack
Plus.
 In the next five years, the sector is expected to triple to around $ 60 bn.
 More than 80 percent of the total packaging in India constitutes rigid packaging.
The remaining 20 percent comprises flexible packaging.
 The total demand for paper is estimated to be around 6 mn tones, of which about
40 percent is consumed by the packaging industry.

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  There are about 600-700 packaging machinery manufacturers, 95percent of which
are in the small and medium sector located all over India.
 India's per capita packaging consumption is less than $ 15 against worldwide
average of nearly $ 100.

B. Methods of Transportation:

Transportation takes place in two aspects: Carriage inwards and Carriage Outwards.

a. Carriage Inwards:
Carriage inwards is indirect cost incurred by us, i.e.: the transportation cost spent in
getting the raw materials into the factory premises. Ex: Printed Paper.

b. Carriage Outwards:
Carriage outwards are selling and distribution expenses. These are such expenses that
are incurred on the finished goods; i.e.: when the finished cartons are sent to the final
customer for final consumption. This expense is generally 6% of the amount that will
be received on the completion of contract.
C. Existing Rates of Transport:
The existing rates of transportation are as follows:
6% of the cost of 1 corrugated box is been given to the transporter.
For example: if 7000 boxes are being dispatched and 1 5ply box costs Rs. 31.50 then
Rs. 13,230 will be paid to the transporter.

D. Channels of Distribution:
Channels of distribution means, the number of intermediaries that the product passes
through before reaching the final consumer. We have taken in this zero level of
distribution; i.e.: we are in direct contact with the final consumer. We deal with the
consumer directly; we take orders of corrugated boxes as per the specification

21
 provided by the final consumers. We enter into direct contract with the final
consumers on a fixed price.

E. Analysis of Past and Present Demand:

 The average number of single facers per company has increased from 1.2 to 2.69.
 Average production per day per single facer has increased from 1387 to 2724.

F. Quantity Value of Consumption:

The raw materials are purchased on daily basis and the products so manufactured are
sold to the customers on daily basis.
Lot size depends upon the quantity demanded by the customer’s.

G. Major Consumers of Product

A list of major industries, in which it is extensively used at present , is being given
below:

A. Breweries
B. Glass-wares
C. Cigarettes
D. Pharmaceuticals
E. Soap & cosmetics
F. Milk & milk products
G. Biscuits

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H. Tea & coffee
I. Hosiery & footwear
J. Toys
K. Photographic Equipments
L. Textiles & ready-made garments
M. Electric goods
N. Electric bulbs
O. Hardware
P. Bicycle & auto parts
Q. Rubber and rubber products
R. Stationery
S. Matches
T. Defense
U. Food Preservation
V. Cashew Nut Industry
W. Synthetic (Man-Made) Industry
X. Horticulture products, tobacco
Y. Apple, Cherry, Grapes etc.

H. Analysis of Past and Present Supply

 The consumption of 3 and 5 ply boxes is increasing at a growth rate of 12% to

15% per year.
 A significant growth in consumption of paper above 150 GSM.
 A significant growth in consumption of paper above 20 BF. We see more and
more consumption of 20BF, 22BF, 28BF in the recent trends.

I. Competitive Position of the Product

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 Freshness - While consumers want convenience, they also want freshness.
Modified
Atmosphere Packaging - that preserves shelf life and maintains freshness.
 Tamper Evidence - The demand for tamper evident packaging will increase.
 Labeling - The demands on labels to provide.
 Paper Strength- We use 22BF paper. It has the highest demand in the market.

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